Biz Beat Blog

J.C. Penney posts holiday sales increase, has $2 billion in liquidity

J.C. Penney said Tuesday it posted a 2 percent sales increase in the fourth quarter, the first time it had a quarterly sales gain since 2011. The Plano-based retailer also said it ended the year with more than $2 billion in cash and available credit.

In the key November-December holiday period sales increased 3.1 percent from a year ago. Earlier, Penney reported a 10.1 percent sales increase in November. A year ago, during the transformation under former CEO Ron Johnson, sales fell 32 percent in the holiday quarter. So Penney still has a long way to dig out of its failed attempt to remake the department store.

CEO Myron “Mike” Ullman said the steady improvements in the business last year show that the company’s turnaround is on track.

“In spite of the significant headwinds facing all retailers this season, including unprecedented harsh weather conditions in many parts of the country, we delivered on our promise to generate positive comparable store sales growth in the fourth quarter,” Ullman said.

Analysts have been worried that the company would keep burning through its cash as it did in 2012 and early 2013. Ullman raised about $800 million in a stock offering that was controversial for its timing.

Online sales at jcp.com increased 26.3 percent from last year.

Several departments did well during the holiday season including its instore Sephora shops, activewear, sweaters, outerwear, dresses, boots, men’s clothing, luggage and housewares. The home department is still a work in progress and during the holiday season it had a lot of clearance merchandise that was being discontinued, including J.C. Penney Everyday, the brand that was designed by Martha Stewart and was the subject of a lawsuit with Macy’s.

Ullman credited a combination of merchandise, customers service and “compelling” discount offers for the sales gain during a difficult and competitive holiday shopping environment for retailers.

The stock price, which has reached new lows so far this year, was trading up in the pre-market.

Penney will report results for the fourth quarter that ended Feb. 1 on Feb. 26. Analysts surveyed by Thomson Reuters expect Penney to post a loss of 73 cents a share on revenue of $3.95 billion. That compares with a loss of $1.95 a share last year in the fourth quarter.

Looking ahead to this year, Ullman said the staff is encouraged by the company’s results. Ullman has been working on staff morale and trying to build back management bench strength that was decimated in 2012 by layoffs, early retirements and frustrated staffers leaving for other jobs. The board asked him to come back to his old job in April after Johnson was fired. Ullman was CEO for seven years before Johnson took over in November 2011.

“We remain steadfast in our focus to build on these achievements and return to profitable growth,” Ullman said.

Editor Picks

Comments

To post a comment, log into your chosen social network and then add your comment below. Your comments are subject to our Terms of Service and the privacy policy and terms of service of your social network. If you do not want to comment with a social network, please consider writing a letter to the editor.

Ad:TopLeft

Ad: Position1

Archives Title

Archives

ArchivesAbout this blog

About This Blog

Daily breaking news alerts from the Business staff of The Dallas Morning News.